Chinese aluminium scrap prices advance in line with SHFE aluminium

Chinese aluminium scrap prices advanced on Scrap Register Price Index as on Monday, while aluminium futures prices at Shanghai Futures Exchange settled higher as support seen after the update that China's aluminium smelters pledged last week to shut more production this month and not to add any new capacity in 2016, as the industry pushes to shore up plunging prices.

According to the Scrap Register Price Index, the major Chinese aluminium scrap commodities like 6063 extrusion, aluminium scrap, aluminium can and EC wire (Al >99%) traded up on Monday.

However, the most active 1602 aluminium contract on the Shanghai Futures Exchange settled up by 1.05% to 10,595 yuan per ton on Monday from the previous close of 10,485 yuan per ton. The SHFE aluminium prices touched an intra-day high of 10,705 yuan per ton and an intra-day low of 10,535 yuan per ton during Monday.

The announcement that Chinese smelters would cut 500,000 tons by year end did little for the (aluminium) price. Also Century Aluminum began shutting one of the two potlines at its Mount Holly, South Carolina smelter on Monday ahead of a planned full curtailment on December 31, even as a potential deal to keep the plant operating at reduced capacity gathered steam.

Meanwhile LME stocks are expected to keep climbing as traders deliver aluminium due to the rising cost of holding metal.